No Penalty If Assessee paid Excise Duty with Interest prior to Issue of Show Cause Notice: CESTAT [Read Order]

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata bench has held that the penalty cannot be imposed if the assessee paid duty along with interest prior to the issue of show-cause notice.

During audit, the departmental officers found that the Appellant did not procure any certificate supporting the availment of the benefit of the exemption Notification and in absence of the same it was held that the Appellant was not eligible to the exemption in respect of the above finished products.

After analysing the facts of the case, Shri P.K.Choudhary, Member(Judicial) observed that the appellant paid the duty with interest even prior to issuance of Show Cause Notice.

“If that is so, the authorities had no jurisdiction to initiate proceedings at all and consequently the question of payment of penalty would not arise at all. The Commissioner(Appeals)’s observation that had the department not pointed out the discrepancy the deficit amount would not have been paid, is an inference not supported by allegation in the notice nor any evidence leading to the conclusion that the Appellant had suppressed the facts. In these circumstances the penalty imposed under Section 11AC of the Central Excise Act, 1944 read with Rule 25 of Central Excise Rules, 2002, cannot be sustained and is therefore setaside. Consequently, the impugned order-in-Appeal is set aside to the extent of confirmation of penalty,” the Tribunal said.

To Read the full text of the Order CLICK HERE

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